The Indian economy is expected to grow by 9.2 per cent in 2010-11 following impressive growth in the manufacturing and services sectors, the Centre for Monitoring Indian Economy (CMIE) said here.
"We maintain that the Indian economy will grow by 9.2 per cent in 2010-11, as we expect impressive growth in the manufacturing and services sectors as well," the CMIE said in a statement.
The Index of Industrial Production (IIP) dropped dramatically to 5.6 per cent in August, after growing by 13.8 per cent in July. It had recorded a growth of 11.2 per cent in the June quarter, but we believe that the growth was much higher than 11.2 per cent, it said.
This is because sales revenues of the manufacturing companies rose by 23.8 per cent, while the rate of inflation in manufactured products (including petroleum products) was 8.2 per cent, implying that sales volumes grew by about 14.4 per cent.
The IIP has a very old base year (1993-94), outdated weights and a fixed frame of products and companies, and had miscalculated industrial growth for the preceding two years (2008-09 and 2009-10) as well. It is therefore imperative that the index is corrected at the earliest to enable meaningful analysis, it said.
In August, the rate of inflation touched a six-month low of 8.5 per cent. It was calculated as per the new series released on 14 September with 2004-05 as the base year. A moderation in the prices of primary food articles, manufactured food products and paper & paper products helped keeping a check on inflation.
We expect WPI-based inflation to moderate to 7.9 per cent in 2010-11, as compared to our earlier projection of 8.5 per cent based on the old series, it said.
CMIE expects that the agricultural production to grow by 7.2 per cent in 2010-11.
The withdrawal of the southwest monsoon has been delayed this year, and the plentiful rain across large parts of the country has encouraged farmers to bring more land under cultivation.
As of October 7, kharif sowing was completed across 1,022 lakh hectares, which was 64 lakh hectares more than the acreage reported in the corresponding period of 2009.
Cumulative rainfall for the season (June-September) is 102 per cent of the long period average, according to the India Meteorological Department's end-of-season report.
Agricultural production is therefore expected to grow by a healthy 7.2 per cent in 2010-11, after recording a 6.6 per cent decline in the preceding fiscal, it said.
